Water Rates: San Juan Capistrano Looking at Six Years of Hikes

The city’s consultant studying San Juan Capistrano’s water rates is considering price hikes for the next six consecutive years.

For the second time in as many weeks, the city will be hosting a water rate workshop. Last week’s was before the Utilities Commission. This week, the City Council will hold the meeting where residents can give their feedback.

In August, an Orange County Superior Court judge ruled that the city’s water rates were illegal, violating the State Constitution.

But even before that, the city was planning to take a fresh look at its pricing structure. The last time the council approved a water study, in February 2010, it covered the financial needs of the city’s water department through June 2014, with regular increases through July 2013.

Now comes a new contractor, Raftelis Financial Consultants, charged with coming up with a plan to carry the city through to 2019. The firm is looking at possible 7 percent increases in 2015 and 2016, followed by four years of 5 percent price hikes each year, according to a Power Point presentation shown at last week’s meeting.

The plan would bring in $5 million more a year compared to today's revenue flow by the year 2020, excluding revenues from recycled water, according to the slides. It would get the city out of its water-related debt by 2015, seeing a $12 million balance by 2020.

One of the goals is to increase the reserve, so the city can handle operating expense fluctuations, address emergencies, plan for improvement projects and satisfy credit rate agencies, according to the presentation.

The City Council will meet at 5:30 p.m. Thursday at City Hall, 32400 Paseo Adelanto, San Juan Capistrano.